What is one of the key components of operating expenses?

Operating expenses refer to the costs associated with the day-to-day functions of running a business. Among these expenses, referral expenses can indeed play a significant role, especially in industries that rely heavily on customer referrals to generate sales. These costs are often incurred when a company pays a commission or fee to someone for bringing in a new customer, which helps to drive business growth.

While other costs such as advertising costs, insurance premiums, and employee flexibility are also important components of a company's overall expense structure, referral expenses are specifically focused on incentivizing and rewarding customer acquisition through referrals, aligning closely with the operational goals of many businesses. This highlights the strategic importance of managing referral expenses effectively as part of a company's operating expenditures.